OMEGA HEALTHCARE INVESTORS INC 10-Q

Item 1 - Financial Statements OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2022 2021 ​ ​ (Unaudited) ​ ​ ​ ASSETS ​ ​ ​ ​ ​ Real estate assets ​ ​ Buildings and improvements ​ $ 7,477,855 $ 7,448,126 Land ​ ​ 937,235 ​ ​ 916,328 Furniture and equipment ​ ​ 516,410 ​ ​ 511,271 Construction in progress ​ ​ 77,633 ​ ​ 74,062 Total real estate assets ​ ​ 9,009,133 ​ ​ 8,949,787 Less accumulated depreciation ​ ( 2,212,183 ) ( 2,160,696 ) Real estate assets – net ​ 6,796,950 6,789,091 Investments in direct financing leases – net ​ 10,849 10,873 Mortgage notes receivable – net ​ 819,577 835,086 ​ ​ ​ 7,627,376 ​ ​ 7,635,050 Other investments – net ​ 506,942 469,884 Investments in unconsolidated joint ventures ​ 192,238 194,687 Assets held for sale ​ 92,762 261,151 Total investments ​ 8,419,318 8,560,772 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 491,247 20,534 Restricted cash ​ 3,534 3,877 Contractual receivables – net ​ 13,172 11,259 Other receivables and lease inducements ​ ​ 269,992 ​ ​ 251,815 Goodwill ​ 651,024 651,417 Other assets ​ 166,318 138,804 Total assets ​ $ 10,014,605 $ 9,638,478 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ Revolving credit facility ​ $ 354,888 $ — Secured borrowings ​ 379,644 362,081 Senior notes and other unsecured borrowings – net ​ 4,893,839 4,891,455 Accrued expenses and other liabilities ​ 256,390 276,716 Total liabilities ​ 5,884,761 5,530,252 ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ Preferred stock $ 1.00 par value authorized – 20,000 shares, issued and outstanding – none ​ ​ — ​ ​ — Common stock $ .10 par value authorized – 350,000 shares, issued and outstanding – 238,206 shares as of March 31, 2022 and 239,061 shares as of December 31, 2021 ​ 23,820 ​ 23,906 Additional paid-in capital ​ 6,401,207 ​ 6,427,566 Cumulative net earnings ​ 3,201,081 ​ 3,011,474 Cumulative dividends paid ​ ( 5,714,595 ) ​ ( 5,553,908 ) Accumulated other comprehensive income (loss) ​ 6,318 ​ ( 2,200 ) Total stockholders’ equity ​ 3,917,831 ​ 3,906,838 Noncontrolling interest ​ 212,013 ​ 201,388 Total equity ​ 4,129,844 ​ 4,108,226 Total liabilities and equity ​ $ 10,014,605 $ 9,638,478 See notes to consolidated financial statements . 2 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, ​ 2022 2021 Revenues ​ ​ ​ ​ ​ ​ Rental income ​ $ 216,883 ​ $ 237,761 Income from direct financing leases ​ 256 ​ 258 Mortgage interest income ​ 20,549 ​ 23,625 Other investment income ​ 10,594 ​ 11,652 Miscellaneous income ​ 1,033 ​ 472 Total revenues ​ 249,315 ​ 273,768 ​ ​ ​ ​ ​ ​ ​ Expenses ​ ​ Depreciation and amortization ​ 82,752 ​ 84,849 General and administrative ​ 16,385 ​ 16,152 Real estate taxes ​ ​ 3,603 ​ ​ 2,729 Acquisition, merger and transition related costs ​ 1,513 ​ 1,814 Impairment on real estate properties ​ 3,511 ​ 28,689 Recovery on direct financing leases ​ — ​ ( 553 ) Provision (recovery) for credit losses ​ 1,824 ​ ( 1,024 ) Interest expense ​ 58,145 ​ 58,521 Total expenses ​ 167,733 ​ 191,177 ​ ​ ​ ​ ​ ​ ​ Other income (expense) ​ ​ ​ Other (expense) income – net ​ ( 455 ) ​ 231 Loss on debt extinguishment ​ ( 6 ) ​ ( 29,670 ) Gain on assets sold – net ​ ​ 113,637 ​ ​ 100,342 Total other income ​ 113,176 ​ 70,903 ​ ​ ​ ​ ​ ​ ​ Income before income tax expense and income from unconsolidated joint ventures ​ 194,758 ​ 153,494 Income tax expense ​ ( 1,225 ) ​ ( 958 ) Income from unconsolidated joint ventures ​ 1,623 ​ 11,830 Net income ​ 195,156 ​ 164,366 Net income attributable to noncontrolling interest ​ ( 5,549 ) ​ ( 4,388 ) Net income available to common stockholders ​ $ 189,607 ​ $ 159,978 ​ ​ ​ ​ ​ ​ ​ Earnings per common share available to common stockholders: ​ ​ Basic: ​ ​ Net income available to common stockholders ​ $ 0.79 ​ $ 0.69 Diluted: ​ ​ Net income ​ $ 0.79 ​ $ 0.69 ​ See notes to consolidated financial statements . ​ 3 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ 2022 2021 Net income ​ $ 195,156 ​ $ 164,366 Other comprehensive income (loss): ​ ​ ​ Foreign currency translation ​ ( 10,809 ) ​ 1,186 Cash flow hedges ​ 19,578 ​ 35,801 Total other comprehensive income ​ 8,769 ​ 36,987 Comprehensive income ​ 203,925 ​ 201,353 Comprehensive income attributable to noncontrolling interest ​ ( 5,800 ) ​ ( 5,377 ) Comprehensive income attributable to common stockholders ​ $ 198,125 ​ $ 195,976 ​ See notes to consolidated financial statements. ​ ​ 4 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Three Months Ended March 31, 2022 and 2021 Unaudited (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Cumulative ​ Cumulative ​ Other ​ Total ​ ​ ​ ​ ​ ​ Stock ​ Paid-in ​ Net ​ Dividends ​ Comprehensive ​ Stockholders’ ​ Noncontrolling ​ Total ​ Par Value Capital Earnings Paid Income (Loss) Equity Interest Equity Balance at December 31, 2021 ​ $ 23,906 ​ $ 6,427,566 ​ $ 3,011,474 ​ $ ( 5,553,908 ) ​ $ ( 2,200 ) ​ $ 3,906,838 ​ $ 201,388 ​ $ 4,108,226 Stock related compensation ​ ​ — ​ ​ 6,905 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,905 ​ ​ — ​ ​ 6,905 Issuance of common stock ​ ​ 12 ​ ​ 1,135 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,147 ​ ​ — ​ ​ 1,147 Repurchase of common stock ​ ​ ( 98 ) ​ ​ ( 27,223 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 27,321 ) ​ ​ — ​ ​ ( 27,321 ) Common dividends declared ($ 0.67 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 160,687 ) ​ ​ — ​ ​ ( 160,687 ) ​ ​ — ​ ​ ( 160,687 ) Vesting/exercising of Omega OP Units ​ ​ — ​ ​ ( 7,176 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 7,176 ) ​ ​ 7,176 ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,276 ) ​ ​ ( 5,276 ) Capital contribution from noncontrolling interest holder in consolidated JV ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,925 ​ ​ 2,925 Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 8,518 ​ ​ 8,518 ​ ​ 251 ​ ​ 8,769 Net income ​ ​ — ​ ​ — ​ ​ 189,607 ​ ​ — ​ ​ — ​ ​ 189,607 ​ ​ 5,549 ​ ​ 195,156 Balance at March 31, 2022 ​ $ 23,820 ​ $ 6,401,207 ​ $ 3,201,081 ​ $ ( 5,714,595 ) ​ $ 6,318 ​ $ 3,917,831 ​ $ 212,013 ​ $ 4,129,844 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2020 ​ $ 23,119 ​ $ 6,152,887 ​ $ 2,594,735 ​ $ ( 4,916,097 ) ​ $ ( 12,768 ) ​ $ 3,841,876 ​ $ 194,731 ​ $ 4,036,607 Stock related compensation ​ ​ — ​ ​ 5,433 ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,433 ​ ​ — ​ ​ 5,433 Issuance of common stock ​ ​ 219 ​ ​ 72,908 ​ ​ — ​ ​ — ​ ​ — ​ ​ 73,127 ​ ​ — ​ ​ 73,127 Common dividends declared ($ 0.67 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 158,335 ) ​ ​ — ​ ​ ( 158,335 ) ​ ​ — ​ ​ ( 158,335 ) Vesting/exercising of Omega OP Units ​ ​ — ​ ​ ( 4,767 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 4,767 ) ​ ​ 4,767 ​ ​ — Conversion and redemption of Omega OP Units to common stock ​ ​ — ​ ​ 82 ​ ​ — ​ ​ — ​ ​ — ​ ​ 82 ​ ​ ( 82 ) ​ ​ — Omega OP Units distributions ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 9,855 ) ​ ​ ( 9,855 ) Other comprehensive income ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 35,998 ​ ​ 35,998 ​ ​ 989 ​ ​ 36,987 Net income ​ ​ — ​ ​ — ​ ​ 159,978 ​ ​ — ​ ​ — ​ ​ 159,978 ​ ​ 4,388 ​ ​ 164,366 Balance at March 31, 2021 ​ $ 23,338 ​ $ 6,226,543 ​ $ 2,754,713 ​ $ ( 5,074,432 ) ​ $ 23,230 ​ $ 3,953,392 ​ $ 194,938 ​ $ 4,148,330 ​ See notes to consolidated financial statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 Cash flows from operating activities ​ ​ Net income ​ $ 195,156 ​ $ 164,366 ​ Adjustment to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 82,752 ​ 84,849 ​ Impairment on real estate properties ​ 3,511 ​ 28,689 ​ Recovery on direct financing leases ​ — ​ ( 553 ) ​ Provision for rental income ​ 3,151 ​ 2,750 ​ Provision (recovery) for credit losses ​ 1,824 ​ ( 1,024 ) ​ Amortization of deferred financing costs and loss on debt extinguishment ​ 3,199 ​ 32,423 ​ Accretion of direct financing leases ​ 19 ​ 12 ​ Stock-based compensation expense ​ 6,860 ​ 5,396 ​ Gain on assets sold – net ​ ( 113,637 ) ​ ( 100,342 ) ​ Amortization of acquired in-place leases – net ​ ( 1,608 ) ​ ( 6,221 ) ​ Effective yield payable on mortgage notes ​ 463 ​ 311 ​ Interest paid-in-kind ​ ​ ( 2,196 ) ​ ​ ( 1,754 ) ​ (Income) loss from unconsolidated joint ventures ​ ​ ( 677 ) ​ ​ 72 ​ Change in operating assets and liabilities – net: ​ ​ ​ ​ Contractual receivables ​ ( 1,912 ) ​ ( 1,020 ) ​ Straight-line rent receivables ​ ( 24,137 ) ​ ( 13,459 ) ​ Lease inducements ​ 1,932 ​ 1,168 ​ Other operating assets and liabilities ​ ( 22,498 ) ​ ( 19,688 ) ​ Net cash provided by operating activities ​ 132,202 ​ 175,975 ​ Cash flows from investing activities ​ ​ ​ ​ ​ Acquisition of real estate ​ ( 113,157 ) ​ ( 594,504 ) ​ Acquisition deposit - net ​ — ​ 2,500 ​ Net proceeds from sale of real estate investments ​ 332,552 ​ 188,253 ​ Investments in construction in progress ​ ( 4,667 ) ​ ( 9,806 ) ​ Proceeds from sale of direct financing lease and related trust ​ ​ — ​ ​ 553 ​ Placement of mortgage loans ​ ( 2,801 ) ​ ( 4,717 ) ​ Collection of mortgage principal ​ 22,913 ​ 1,065 ​ Investments in unconsolidated joint ventures ​ ​ — ​ ​ ( 10,443 ) ​ Distributions from unconsolidated joint ventures in excess of earnings ​ 61 ​ 7,489 ​ Capital improvements to real estate investments ​ ( 13,548 ) ​ ( 4,012 ) ​ Receipts from insurance proceeds ​ 22 ​ 3,017 ​ Investments in other investments ​ ( 100,225 ) ​ ( 27,636 ) ​ Proceeds from other investments ​ 56,188 ​ 51,911 ​ Net cash provided by (used in) investing activities ​ 177,338 ​ ( 396,330 ) ​ Cash flows from financing activities ​ ​ ​ Proceeds from long-term borrowings ​ 420,208 ​ 1,905,128 ​ Payments of long-term borrowings ​ ( 66,896 ) ​ ( 1,667,707 ) ​ Payments of financing related costs ​ ( 6 ) ​ ( 33,836 ) ​ Net proceeds from issuance of common stock ​ 1,147 ​ 73,127 ​ Repurchase of common stock ​ ( 27,321 ) ​ — ​ Dividends paid ​ ( 160,641 ) ​ ( 158,298 ) ​ Noncontrolling members’ contributions to consolidated joint venture ​ ​ 22 ​ ​ — ​ Distributions to Omega OP Unit Holders ​ ( 5,276 ) ​ ( 9,855 ) ​ Net cash provided by financing activities ​ 161,237 ​ 108,559 ​ Effect of foreign currency translation on cash, cash equivalents and restricted cash ​ ( 407 ) ​ 136 ​ Increase (decrease) in cash, cash equivalents and restricted cash ​ 470,370 ​ ( 111,660 ) ​ Cash, cash equivalents and restricted cash at beginning of period ​ 24,411 ​ 167,558 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 494,781 ​ $ 55,898 ​ ​ See notes to consolidated financial statements . ​ ​ 6 Table of Contents OMEGA HEALTHCARE INVESTORS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited March 31, 2022 ​ NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Business Overview and Organization Omega Healthcare Investors, Inc. (“Parent”) is a Maryland corporation that, together with its consolidated subsidiaries (collectively, “Omega,” the “Company,” “we,” “our,” or “us”) invests in healthcare-related real estate properties located in the United States (“U.S.”) and the United Kingdom (“U.K.”). Our core business is to provide financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities (“SNFs”), assisted living facilities (“ALFs”), and to a lesser extent, independent living facilities (“ILFs”), rehabilitation and acute care facilities (“specialty facilities”) and medical office buildings. Our core portfolio consists of long-term “triple net” leases and mortgage loans with healthcare operating companies and affiliates (collectively, our “operators”). In addition to our core investments, we selectively make loans to operators for working capital and capital expenditures. From time to time, we also acquire equity interests in joint ventures or entities that support the long-term healthcare industry and our operators. Omega has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes and is structured as an umbrella partnership REIT (“UPREIT”) under which all of Omega’s assets are owned directly or indirectly by, and all of Omega’s operations are conducted directly or indirectly through, its operating partnership subsidiary, OHI Healthcare Properties Limited Partnership (collectively with its subsidiaries, “Omega OP”). Omega has exclusive control over Omega OP’s day-to-day management pursuant to the partnership agreement governing Omega OP. As of March 31, 2022, Parent owned approximately 97 % of the issued and outstanding units of partnership interest in Omega OP (“Omega OP Units”), and other investors owned approximately 3 % of the outstanding Omega OP Units. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the interim periods reported herein are not necessarily indicative of results to be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the financial statements and the footnotes thereto included in our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2022. Omega’s consolidated financial statements include the accounts of (i) Parent, (ii) Omega OP, (iii) all direct and indirect wholly owned subsidiaries of Omega and (iv) other entities in which Omega or Omega OP has a majority voting interest and control. All intercompany transactions and balances have been eliminated in consolidation, and Omega’s net earnings are reduced by the portion of net earnings attributable to noncontrolling interests. Segments We conduct our operations and report financial results as one business segment. The presentation of financial results as one reportable segment is consistent with the way we operate our business and is consistent with the manner in which our Chief Operating Decision Maker (CODM), our Chief Executive Officer, evaluates performance and makes resource and operating decisions for the business. 7 Table of Contents Reclassification Certain line items on our Consolidated Statements of Changes in Equity, Consolidated Balance Sheets and Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation. Risks and Uncertainties including COVID-19 The Company is subject to certain risks and uncertainties affecting the healthcare industry, including those stemming from the novel coronavirus (“COVID-19”) global pandemic described below, which has disproportionately impacted the senior care sector, as well as those stemming from healthcare legislation and changing regulation by federal, state and local governments. Additionally, we are subject to risks and uncertainties as a result of changes affecting operators of nursing home facilities due to the actions of governmental agencies and insurers to limit the rising cost of healthcare services. Recent Accounting Pronouncements ASU – 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures On March 31, 2022, the FASB issued ASU 2022-02, which eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) and requires additional disclosures for certain loan modifications. ASU 2022-02 also requires entities to disclose gross write-offs of financing receivables and net investments in leases by year of origination. The TDR guidance can be adopted using either a prospective or modified retrospective transition approach and the additional disclosure requirements are made prospectively. ASU 2022-02 would be effective for Omega’s first quarter of 2023, and early adoption is permitted. We are still evaluating the impact that adopting ASU 2022-02 will have on our consolidated financial statements. ASU – 2020-04, Financial Instruments – Reference Rate Reform (Topic 848) On March 12, 2020, the FASB issued ASU 2020-04, which contains optional practical expedients for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). The guidance may be elected over time until December 31, 2022, as reference rate reform activities occur. The Company has several derivative instruments (See Note 16 – Derivatives and Hedging), a $ 1.45 billion senior unsecured multicurrency revolving credit facility, and a $ 50 million senior unsecured term loan facility (See Note 15 – Borrowing Activities and Arrangements) that reference LIBOR. We also have a $ 25.0 million senior secured debtor-in-possession (“DIP”) facility loan with an operator that references LIBOR (See Note 6 – Other Investments), but it matures in 2022 prior to LIBOR being discontinued. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. Our credit facilities that reference LIBOR contain customary LIBOR replacement language, including, but not limited to, the use of rates based on the secured overnight financing rate. The Company is evaluating: (i) how the transition away from LIBOR will impact the Company, (ii) whether any additional optional expedients provided by the standards will be adopted, and (iii) the impact that adopting ASU 2020-04 will have on our consolidated financial statements. 8 Table of Contents NOTE 2 – REAL ESTATE ASSETS At March 31, 2022, our leased real estate properties included 674 SNFs, 163 ALFs, 20 ILFs, 16 specialty facilities and two medical office buildings. The following table summarizes the Company’s rental income from operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 ​ 2021 ​ ​ (in thousands) Rental income – operating leases ​ $ 213,597 ​ $ 235,062 Variable lease income – operating leases ​ ​ 3,286 ​ ​ 2,699 Total rental income ​ $ 216,883 ​ $ 237,761 ​ Our variable lease income primarily represents the reimbursement of real estate taxes and ground lease expenses by operators that Omega pays directly. Asset Acquisitions The following table summarizes the asset acquisitions that occurred during the first three months of 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Total Real Estate ​ Initial ​ ​ Facilities ​ Assets Acquired Annual ​ Period ​ SNF ALF Specialty ​ Country/State ​ (in millions) ​ Cash Yield (1) ​ Q1 — 1 — U.K. ​ $ 8.7 (2) 8.0 % Q1 ​ — 1 — ​ U.K. ​ ​ 5.0 ​ 8.0 % Q1 ​ — 27 — ​ U.K. ​ ​ 86.6 (2) 8.0 % Q1 ​ 1 — — ​ MD ​ ​ 8.2 (3) 9.5 % Total 1 29 — ​ $ 108.5 ​ ​ (1) Initial annual cash yield reflects the initial annual contractual cash rent divided by the purchase price. (2) The total consideration paid for this one facility U.K. acquisition and the 27 -facility U.K. acquisition was $ 8.2 million and $ 100.0 million, respectively. In connection with these acquisitions, we allocated $ 0.5 million of the purchase consideration to a deferred tax liability related to this one facility U.K. acquisition, and $ 13.4 million to a deferred tax asset related to the 27 -facility U.K. acquisition. See Note 13 – Taxes for additional information. (3) Total consideration for the 1 facility Maryland acquisition was paid on December 30, 2021, but the closing of the acquisition did not occur until January 1, 2022. NOTE 3 – ASSETS HELD FOR SALE, DISPOSITIONS AND IMPAIRMENTS Periodically we sell facilities to reduce our exposure to certain operators, geographies and non-strategic assets or due to the exercise of a tenant purchase option. In March 2022, we reclassified seven facilities leased to Guardian Healthcare (“Guardian”) to held for sale in connection with the transactions outlined in the restructuring agreement that was executed in April 2022 with Guardian, as discussed further in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements. We also entered into agreements to sell seven of these held for sale facilities in March and April 2022 for estimated gross proceeds of $ 36.5 million. As of March 31, 2022, the remaining 19 facilities in held for sale are all under sales agreements which provide for estimated proceeds of $ 83.1 million, subject to terms and conditions of such agreements. The following is a summary of our assets held for sale: ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2022 2021 Number of facilities held for sale ​ 26 ​ ​ 41 Amount of assets held for sale (in thousands) $ 92,762 ​ $ 261,151 ​ 9 Table of Contents Asset Sales During the three months ended March 31, 2022, we sold 27 facilities, subject to operating leases, for approximately $ 332.6 million in net cash proceeds, recognizing a net gain of approximately $ 113.6 million. One of these facilities was sold to the joint venture that was consolidated in the first quarter of 2022, as discussed further in Note 8 – Variable Interest Entities. The proceeds and gain primarily relate to the sale of the 22 facilities that were previously leased and operated by Gulf Coast Health Care LLC (together with certain affiliates “Gulf Coast”) and were included in assets held for sale as of December 31, 2021. The net cash proceeds from the sale, including related costs accrued for as of the end of the first quarter, were $ 304.0 million, and we recognized a net gain of approximately $ 113.5 million. We elected to exit these facilities following Gulf Coast commencing the Chapter 11 bankruptcy process in October 2021. The agreement includes an earnout clause pursuant to which the buyer is obligated to pay an additional $ 18.7 million to Omega if certain financial metrics are achieved at the facilities in the three years following the sale. As we have determined it is not probable that we will receive any additional funds, we have not recorded any income related to the earnout clause. Two of the facilities sold during the three months ended March 31, 2022 were previously leased to Guardian and were sold for $ 3.0 million in gross proceeds, which resulted in a net gain of approximately $ 0.5 million, in connection with on-going restructuring negotiations and were included in held for sale as of December 31, 2021. Real Estate Impairments During the three months ended March 31, 2022, we recorded impairments of approximately $ 3.5 million on two facilities that were classified as held for sale during the quarter for which the carrying values exceeded the estimated fair values less costs to sell. To estimate the fair value of the facilities determined to be held for sale for the impairments noted above, we utilized a market approach that considered binding sale agreements (a Level 1 input) or non-binding offers from unrelated third parties and/or broker quotes (a Level 3 input). NOTE 4 – CONTRACTUAL RECEIVABLES AND OTHER RECEIVABLES AND LEASE INDUCEMENTS Contractual receivables relate to the amounts currently owed to us under the terms of our lease and loan agreements. Effective yield interest receivables relate to the difference between the interest income recognized on an effective yield basis over the term of the loan agreement and the interest currently due to us according to the contractual agreement. Straight-line rent receivables relate to the difference between the rental revenue recognized on a straight-line basis and the amounts currently due to us according to the contractual agreement. Lease inducements result from value provided by us to the lessee, at the inception, modification or renewal of the lease, and are amortized as a reduction of rental income over the non-cancellable lease term. A summary of our net receivables and lease inducements by type is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 ​ ​ (in thousands) ​ Contractual receivables – net ​ $ 13,172 ​ $ 11,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective yield interest receivables ​ $ 9,127 ​ $ 9,590 ​ Straight-line rent receivables ​ 169,028 ​ 148,455 ​ Lease inducements ​ 91,837 ​ 93,770 ​ Other receivables and lease inducements ​ $ 269,992 ​ $ 251,815 ​ ​ 10 Table of Contents Agemo Holdings, LLC Agemo Holdings, LLC (“Agemo”) continued to not pay contractual rent and interest due under its lease and loan agreements during the first quarter of 2022. As we already placed Agemo on a cash basis of revenue recognition during the third quarter of 2020, no revenue was recorded during the three months ended March 31, 2022. See Note 6 – Other Investments for additional details on our loans with Agemo. For the three months ended March 31, 2021, Agemo generated approximately 4.6 %, respectively, of our total revenues (excluding the impact of write-offs in the first quarter of 2021). During the three months ended March 31, 2022, the Agemo lease was amended to allow for the extension of the rent deferral through April 2022, which represents an additional deferral of approximately $ 1.6 million of rent. Additionally, in the first quarter of 2022, we extended the forbearance period from February 28, 2022 to April 30, 2022. The forbearance period was subsequently extended to May 31, 2022. Guardian Healthcare Guardian Healthcare (“Guardian”) continued to not make contractual rent and interest payments under its lease and loan agreements during the first quarter of 2022. As we already placed Guardian on a cash basis of revenue recognition in the fourth quarter of 2021, no revenue was recorded during the three months ended March 31, 2022. In the first quarter of 2022, we transitioned eight facilities previously leased to Guardian to two other operators as part of the planned restructuring. Additionally, we also sold two facilities previously leased to Guardian and three facilities previously subject to the Guardian mortgage loan in the first quarter of 2022 as part of on-going restructuring activities. In April 2022, we agreed to a formal restructuring agreement, master lease amendment and mortgage loan amendment with Guardian. As part of the restructuring agreement and amendments, Omega and Guardian agreed to the following: ● Extend the lease and loan terms to December 31, 2031 and allow Guardian the option to extend the maturity date for both the lease and loan through September 30, 2034 , ● sell 6 facilities subject to the master lease agreement to other operators in exchange for a reduction in base rent equal to 9.5 % of the agreed upon fair value of these facilities, ● require Guardian to purchase one leased facility for $ 3.5 million before June 30, 2022, with a corresponding reduction in base rent equal to 9.5 % of the proceeds, ● reduce the combined rent and mortgage interest to an aggregate $ 24.0 million following the completion of sale of the six leased facilities and Guardian repurchase of the one leased facility are completed and ● allow for the deferral of up to $ 18.0 million of aggregate rent and interest, effective retrospectively, from October 1, 2021 through April 1, 2022 based on the existence of certain financial conditions, with repayment required after September 30, 2024 based on certain financial metrics and in full by the current lease termination date of December 31, 2031, or the earlier termination of the lease for any reason. Guardian elected to utilize the allowed deferral in the restructuring agreement for unpaid contractual rent and interest during the period from October 2021 through March 2022 and for a portion of rent and interest in April 2022. In April 2022, Guardian made a partial payment after exhausting the maximum allowable deferral of $ 18.0 million under the restructuring agreement. Guardian is required to make contractual rent and interest payments going forward under the restructuring agreements. As discussed in Note 3 – Assets Held for Sale, Dispositions and Impairments, the seven leased facilities expected to be sold based on the terms within the restructuring agreement are included in assets held for sale as of March 31, 2022. As of March 31, 2022, we have $ 7.4 million of letters of credit from Guardian as collateral which could be applied against our uncollected rent and interest receivables. See Note 5 – Mortgage Notes Receivable for additional details on our mortgage with Guardian. For the three months ended March 31, 2021, Guardian generated approximately 3.2 % of our total revenues (excluding the impact of straight-line write-offs in the first quarter of 2021). 11 Table of Contents Other operator updates From January through March 2022, an operator representing 3.8 % and 3.3 %, respectively, of total revenue (excluding the impact of write-offs) for the three months ended March 31, 2022 and 2021, did not pay its contractual amounts due under its lease agreement. In March 2022, the lease with this operator was amended to allow for a short-term rent deferral for January through March 2022. The deferred rent balance accrues interest monthly at a rate of 5 % per annum. This operator paid the contractual amount due under its lease agreement in April 2022. The operator is required to repay the deferred rent balance and accrued interest by December 31, 2022. Omega holds a $ 1.0 million letter of credit and a $ 150.0 thousand security deposit from this operator. We also have a $ 20.0 million revolving credit facility with this operator, and the operator paid contractual interest under the facility from January through April 2022. As of March 31, 2022, the total outstanding principal due under the credit facility was $ 16.0 million. In April 2022, this operator borrowed an additional $ 1.8 million under the credit facility. The credit facility is secured by a first lien on the accounts receivable of the operator. In March 2022, another operator, representing 2.3 % and 2.1 %, respectively, of total revenue (excluding the impact of write-offs) for the three months ended March 31, 2022 and 2021, did not pay its contractual amounts due under its lease agreement. In April 2022, the lease with this operator was amended to allow the operator to apply its $ 2.0 million security deposit toward payment of March 2022 rent and to allow for a short-term rent deferral for April, 2022 with regular rent payments required to resume in May 2022. During the first quarter of 2022, we allowed three other operators, representing an aggregate 2.5 % and 2.7 %, respectively, of total revenue (excluding the impact of write-offs) for the three months ended March 31, 2022 and 2021 to apply $ 1.3 million of their security deposits to pay rent to accommodate short term liquidity issues, with regular rent payments required to resume shortly thereafter. As of April 30, 2022, all of these operators are current on their lease obligations. These operators also are required to begin replenishing their security deposits in 2023. Other straight-line receivables and write-offs During the first quarter of 2022, we wrote-off straight-line rent receivable balances of $ 3.2 million through rental income as a result of transitioning six facilities to another existing operator. NOTE 5 – MORTGAGE NOTES RECEIVABLE As of March 31, 2022, mortgage notes receivable relate to seven fixed rate mortgage notes on 60 facilities. The mortgage notes are secured by first mortgage liens on the borrowers’ underlying real estate and personal property. The mortgage notes receivable relate to facilities located in six states that are operated by six independent healthcare operating companies. We monitor compliance with the terms of our mortgages and when necessary have initiated collection, foreclosure and other proceedings with respect to certain outstanding mortgage notes. The principal amounts outstanding of mortgage notes receivable, net of allowances, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 ​ ​ (in thousands) ​ Mortgage note due 2027 ; interest at 11.02 % ​ $ 82,017 ​ $ 103,762 ​ Mortgage notes due 2029 ; interest at 10.81 % (1) ​ 656,007 ​ 653,564 ​ Other mortgage notes outstanding (2) ​ 150,779 ​ 151,361 ​ Mortgage notes receivable, gross ​ 888,803 ​ 908,687 ​ Allowance for credit losses on mortgage notes receivable ​ ( 69,226 ) ​ ( 73,601 ) ​ Total mortgage notes receivable — net ​ $ 819,577 ​ $ 835,086 ​ (1) Approximates the weighted average interest rate on 45 facilities as of March 31, 2022. (2) Other mortgage notes outstanding have a weighted average interest rate of 8.84 % per annum as of March 31, 2022 and maturity dates ranging from 2023 through 2032 . 12 Table of Contents Mortgage Note due 2027 As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Guardian continued to not pay contractual rent and interest to us during the first quarter of 2022. During the first quarter of 2022, we continued our on-going negotiations to restructure and amend Guardian’s lease and loan agreements. As part of the restructuring negotiations, on February 15, 2022, Guardian completed the sale of three facilities, subject to the Guardian mortgage loan with Omega. Concurrent with the sale, Omega agreed to release the mortgage liens on these facilities in exchange for a partial paydown of $ 21.7 million. In connection with the partial paydown, we recorded a $ 5.1 million recovery for credit losses in the first quarter of 2022 related to the Guardian mortgage loan. Following the mortgage paydown and recovery, Omega has reserves of $ 42.0 million against the loan that reduces the loan carrying value to the estimated fair value of the collateral of $ 40.0 million. As of March 31, 2022, the mortgage loan is secured by three SNFs and one ALF located in Pennsylvania. In April 2022, we agreed to a formal restructuring agreement and amendments to the master lease and mortgage loan with Guardian. See Note 4 – Contractual Receivables and Other Receivables and Lease Inducements. ​ ​ NOTE 6 – OTHER INVESTMENTS Our other investments consist of fixed and variable rate loans to our operators and/or their principals to fund working capital and capital expenditures. These loans may be either unsecured or secured by the collateral of the borrower. A number of the secured loans are collateralized by a leasehold mortgage on, or an assignment or pledge of the membership interest in, the related properties, corporate guarantees and/or personal guarantees. We deem these to be “real estate related loans” that are included as qualifying assets under our quarterly REIT asset tests. As of March 31, 2022, we had 37 loans with 18 different operators. A summary of our other investments is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 2021 ​ ​ ​ (in thousands) ​ Other investment notes due 2024 ; interest at 13.15 % (1) ​ $ 92,613 $ 90,752 ​ Other investment notes due 2030 ; interest at 7.00 % ​ 212,633 ​ 201,613 ​ Other investment note due 2023 ; interest at 12.00 % ​ 37,797 ​ ​ 40,232 ​ Other investment notes outstanding (2) ​ 19,599 ​ 22,076 ​ Real estate related loans - other investments, gross ​ ​ 362,642 ​ ​ 354,673 ​ Other investment notes due 2024 - 2025 ; interest at 8.12 % (1) ​ ​ 55,791 ​ 55,791 ​ Other investment notes outstanding (3) ​ 164,491 ​ 128,814 ​ Non-real estate related loans - other investments, gross ​ ​ 220,282 ​ ​ 184,605 ​ Total other investments, gross ​ ​ 582,924 ​ ​ 539,278 ​ Allowance for credit losses on other investments ​ ​ ( 75,982 ) ​ ​ ( 69,394 ) ​ Total other investments - net ​ $ 506,942 ​ $ 469,884 ​ (1) Approximates the weighted average interest rate as of March 31, 2022. (2) Other investment notes that are real estate related loans have a weighted average interest rate of 11.20 % as of March 31, 2022 with maturity dates ranging from 2022 through 2023 (with $ 10.4 million maturing in 2022 ). (3) Other investment notes that are non-real estate related loans have a weighted average interest rate of 8.08 % as of March 31, 2022 with maturity dates ranging from 2022 through 2032 (with $ 70.5 million maturing in 2022 ). Interest revenue on other investment loans is included within other investment income on the Consolidated Statement of Operations. A summary of our other investments income by real estate and non-real estate loans, as defined above, is as follows: ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2022 2021 ​ (in thousands) Real estate related loans - interest income $ 8,379 $ 7,706 Non-real estate related loans - interest income 2,215 ​ 3,946 Total other investment income $ 10,594 ​ $ 11,652 13 Table of Contents Other investment notes due 2024-2025 As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, Agemo continued to not pay contractual rent and interest to us during the first quarter of 2022. We have continued to monitor the fair value of the collateral associated with Agemo’s $ 25.0 million secured working capital loan (the “Agemo WC Loan”) on a quarterly basis. In the first quarter of 2022, we recorded an additional provision for credit losses of $ 4.7 million related to the Agemo WC Loan as a result of a reduction in the fair value of the underlying collateral assets supporting the current carrying values. The reduction in fair value of the collateral assets was driven by a reduction in Agemo’s working capital accessible to Omega as collateral, after considering other liens on the assets. Other investment notes outstanding Term Loan – $ 25 million On March 25, 2022, we entered into a $ 25.0 million term loan with LaVie Care Centers, LLC (“LaVie,” f/k/a Consulate Health Care) that bears interest at a fixed rate of 8.5 % per annum and matures on March 31, 2032 . The term loan requires quarterly principal payments of $ 1.3 million commencing January 1, 2028 and is secured by a second priority lien on the accounts receivable of the operator. As of March 31, 2022, the outstanding principal under this term loan was $ 25.0 million. NOTE 7 – ALLOWANCE FOR CREDIT LOSSES A rollforward of our allowance for credit losses for the three months ended March 31, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating ​ Financial Statement Line Item Allowance for Credit Loss as of December 31, 2021 ​ Provision (recovery) for Credit Loss for the three months ended March 31, 2022 ​ Write-offs charged against allowance for the three months ended March 31, 2022 ​ Allowance for Credit Loss as of March 31, 2022 ​ ​ ​ (in thousands) 2 ​ Mortgage Notes Receivable $ 15 ​ $ 47 ​ $ — ​ $ 62 3 ​ Mortgage Notes Receivable ​ 1,973 ​ ​ 126 ​ ​ — ​ ​ 2,099 4 ​ Mortgage Notes Receivable ​ 19,461 ​ ​ 610 ​ ​ — ​ ​ 20,071 5 ​ Mortgage Notes Receivable ​ 135 ​ ​ ( 23 ) ​ ​ — ​ ​ 112 6 ​ Mortgage Notes Receivable ​ 52,017 ​ ​ ( 5,135 ) (1) ​ — ​ ​ 46,882 ​ ​ Sub-total ​ 73,601 ​ ​ ( 4,375 ) ​ ​ — ​ ​ 69,226 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in Direct Financing Leases ​ 530 ​ ​ 5 ​ ​ — ​ ​ 535 ​ ​ Sub-total ​ 530 ​ ​ 5 ​ ​ — ​ ​ 535 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Other Investments ​ 29 ​ ​ 53 ​ ​ — ​ ​ 82 3 ​ Other Investments ​ 4,600 ​ ​ 1,063 ​ ​ — ​ ​ 5,663 4 ​ Other Investments ​ 1,172 ​ ​ 1,499 ​ ​ — ​ ​ 2,671 5 ​ Other Investments ​ 7,861 ​ ​ 4,704 (2) ​ — ​ ​ 12,565 6 ​ Other Investments ​ 55,732 ​ ​ ( 731 ) (3) ​ — ​ ​ 55,001 ​ ​ Sub-total ​ 69,394 ​ ​ 6,588 ​ ​ — ​ ​ 75,982 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-Balance Sheet Note Commitments ​ 7 ​ ​ 3 ​ ​ — ​ ​ 10 3 ​ Off-Balance Sheet Note Commitments ​ 458 ​ ​ ( 132 ) ​ ​ — ​ ​ 326 4 ​ Off-Balance Sheet Note Commitments ​ 216 ​ ​ ( 78 ) ​ ​ — ​ ​ 138 4 ​ Off-Balance Sheet Mortgage Commitments ​ 117 ​ ​ ( 106 ) ​ ​ — ​ ​ 11 6 ​ Off-Balance Sheet Note Commitments ​ 143 ​ ​ ( 81 ) ​ ​ — ​ ​ 62 ​ ​ Sub-total ​ 941 ​ ​ ( 394 ) ​ ​ — ​ ​ 547 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 144,466 ​ $ 1,824 ​ $ — ​ $ 146,290 (1) This amount relates to a recovery recorded on the Guardian mortgage loan during the first quarter of 2022. See Note 5 – Mortgage Notes Receivable for additional information on the recovery recorded. (2) This provision includes an additional $ 4.7 million allowance recorded on the Agemo WC Loan during the first quarter of 2022. See Note 6 – Other Investments for additional information on the Agemo WC Loan impairment. (3) During the three months ended March 31, 2022, we received $ 0.7 million of interest and fee payments from Gulf Coast under the $ 25.0 million senior secured DIP facility, the outstanding principal of which was fully reserved against in the fourth quarter of 2021. The DIP loan is on non-accrual status, and the payments received in the first quarter of 2022 have been applied against the outstanding principal using the cost recovery method. In the first quarter of 2022, we recorded a recovery for credit loss equal to the amount of payments applied against the principal. 14 Table of Contents A rollforward of our allowance for credit losses for the three months ended March 31, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating ​ Financial Statement Line Item Allowance for Credit Loss at December 31, 2020 ​ Provision (recovery) for Credit Loss for the three months ended March 31, 2021 ​ Write-offs charged against allowance for the three months ended March 31, 2021 ​ Allowance for Credit Loss as of March 31, 2021 ​ ​ ​ (in thousands) 2 ​ Mortgage Notes Receivable $ 88 ​ $ ( 45 ) ​ $ — ​ $ 43 3 ​ Mortgage Notes Receivable ​ 954 ​ ​ ( 38 ) ​ ​ — ​ ​ 916 4 ​ Mortgage Notes Receivable ​ 26,865 ​ ​ ( 913 ) ​ ​ — ​ ​ 25,952 5 ​ Mortgage Notes Receivable ​ 433 ​ ​ ( 107 ) ​ ​ — ​ ​ 326 6 ​ Mortgage Notes Receivable ​ 4,905 ​ ​ — ​ ​ — ​ ​ 4,905 ​ ​ Sub-total ​ 33,245 ​ ​ ( 1,103 ) ​ ​ — ​ ​ 32,142 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 ​ Investment in Direct Financing Leases ​ 694 ​ ​ ( 6 ) ​ ​ — ​ ​ 688 ​ ​ Sub-total ​ 694 ​ ​ ( 6 ) ​ ​ — ​ ​ 688 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Other Investments ​ 94 ​ ​ ( 40 ) ​ ​ — ​ ​ 54 3 ​ Other Investments ​ 5,113 ​ ​ 217 ​ ​ — ​ ​ 5,330 4 ​ Other Investments ​ 24,397 ​ ​ 413 ​ ​ — ​ ​ 24,810 5 ​ Other Investments ​ 1,853 ​ ​ ( 10 ) ​ ​ ( 95 ) ​ ​ 1,748 ​ ​ Sub-total ​ 31,457 ​ ​ 580 ​ ​ ( 95 ) ​ ​ 31,942 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 ​ Off-Balance Sheet Note Commitments ​ 116 ​ ​ 5 ​ ​ — ​ ​ 121 3 ​ Off-Balance Sheet Note Commitments ​ 2,305 ​ ​ ( 538 ) ​ ​ — ​ ​ 1,767 4 ​ Off-Balance Sheet Mortgage Commitments ​ 24 ​ ​ 38 ​ ​ — ​ ​ 62 ​ ​ Sub-total ​ 2,445 ​ ​ ( 495 ) ​ ​ — ​ ​ 1,950 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 67,841 ​ $ ( 1,024 ) ​ $ ( 95 ) ​ $ 66,722 ​ A summary of our amortized cost basis by year of origination and credit quality indicator is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rating Financial Statement Line Item 2022 2021 2020 2019 2018 2017 2016 & older Revolving Loans ​ Balance as of March 31, 2022 ​ ​ (in thousands) 1 Mortgage notes receivable $ — $ — $ — $ — $ — $ — $ 65,054 $ — ​ $ 65,054 2 Mortgage notes receivable ​ — ​ — ​ 21,325 ​ — ​ — ​ — ​ — ​ — ​ ​ 21,325 3 Mortgage notes receivable ​ — ​ 72,420 ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ 72,420 4 Mortgage notes receivable ​ — ​ 19,204 ​ 89,397 ​ 5,084 ​ 44,274 ​ 46,349 ​ 430,373 ​ — ​ ​ 634,681 5 Mortgage notes receivable ​ — ​ — ​ — ​ — ​ — ​ — ​ 6,929 ​ — ​ ​ 6,929 6 Mortgage notes receivable ​ — ​ — ​ — ​ — ​ — ​ — ​ 88,394 ​ — ​ ​ 88,394 ​ Sub-total ​ — ​ 91,624 ​ 110,722 ​ 5,084 ​ 44,274 ​ 46,349 ​ 590,750 ​ — ​ ​ 888,803 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 Investment in direct financing leases ​ — ​ — ​ — ​ — ​ — ​ — ​ 11,384 ​ — ​ ​ 11,384 ​ Sub-total ​ — ​ — ​ — ​ — ​ — ​ — ​ 11,384 ​ — ​ ​ 11,384 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 Other investments ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ 32,800 ​ ​ 32,800 3 Other investments ​ — ​ — ​ — ​ 17,341 ​ 26,224 ​ — ​ 2,482 ​ 249,893 ​ ​ 295,940 4 Other investments ​ 25,000 ​ 4,749 ​ — ​ 8,525 ​ 92,613 ​ — ​ 38,797 ​ — ​ ​ 169,684 5 Other investments ​ — ​ — ​ — ​ — ​ 29,498 ​ — ​ — ​ — ​ ​ 29,498 6 Other investments ​ — ​ 19,296 ​ — ​ — ​ 4,463 ​ — ​ 31,243 ​ — ​ ​ 55,002 ​ Sub-total ​ 25,000 ​ 24,045 ​ — ​ 25,866 ​ 152,798 ​ — ​ 72,522 ​ 282,693 ​ ​ 582,924 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 25,000 $ 115,669 $ 110,722 $ 30,950 $ 197,072 $ 46,349 $ 674,656 $ 282,693 ​ $ 1,483,111 ​ Interest Receivable on Mortgage and Other Investment Loans We have elected the practical expedient to exclude interest receivable from our allowance for credit losses. As of March 31, 2022, $ 11.3 million of contractual interest receivable is recorded in contractual receivables – net, and $ 9.1 million of effective yield interest receivables is recorded in other receivables and lease inducements on our Consolidated Balance Sheets, both of which are excluded from our allowance for credit losses. We write-off interest receivable to provision for credit losses in the period we determine the interest is no longer considered collectible. 15 Table of Contents During the first quarter of 2022, we did no t recognize any interest income related to loans on non-accrual status as of March 31, 2022. NOTE 8 – VARIABLE INTEREST ENTITIES Unconsolidated Variable Interest Entities We hold variable interests in several variable interest entities (“VIEs”) through our investing and financing activities, which are not consolidated, as we have concluded that we are not the primary beneficiary of these entities as we do not have the power to direct activities that most significantly impact the VIE’s economic performance and/or the variable interest we hold does not obligate us to absorb losses or provide us with the right to receive benefits from the VIE which could potentially be significant. Below is a summary of our assets, liabilities and collateral associated with these unconsolidated VIEs as of March 31, 2022 and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2022 ​ 2021 ​ ​ ​ (in thousands) ​ Assets ​ ​ ​ ​ ​ ​ ​ Real estate assets – net ​ $ 1,136,095 ​ $ 1,144,851 ​ Assets held for sale ​ ​ — ​ ​ 191,016 ​ Other investments – net ​ 236,334 ​ ​ 230,768 ​ Contractual receivables – net ​ 1,310 ​ ​ 1,227 ​ Straight-line rent receivables ​ ( 37,888 ) ​ ​ ( 41,512 ) ​ Lease inducement ​ ​ 62,967 ​ ​ 64,307 ​ Other assets ​ ​ 732 ​ ​ — ​ Total assets ​ 1,399,550 ​ 1,590,657 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ Net in-place lease liability ​ ​ ( 299 ) ​ ​ ( 305 ) ​ Security deposit ​ ​ ( 4,743 ) ​ ​ ( 4,715 ) ​ Contingent liability ​ ​ ( 43,915 ) ​ ​ ( 43,915 ) ​ Other liabilities ​ ​ ( 732 ) ​ ​ — ​ Total liabilities ​ ( 49,689 ) ​ ( 48,935 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral ​ ​ ​ Letters of credit ​ — ​ ​ — ​ Personal guarantee ​ ( 48,000 ) ​ ​ ( 48,000 ) ​ Other collateral (1) ​ ( 1,136,095 ) ​ ​ ( 1,335,867 ) ​ Total collateral ​ ( 1,184,095 ) ​ ​ ( 1,383,867 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum exposure to loss ​ $ 165,766 ​ $ 157,855 ​ (1) Amount excludes accounts receivable that Omega has a security interest in as collateral under the two working capital loans with operators that are unconsolidated VIEs. The fair value of the accounts receivable available to Omega was $ 23.7 million and $ 29.2 million as of March 31, 2022 and December 31, 2021, respectively. In determining our maximum exposure to loss from the unconsolidated VIEs, we considered the underlying carrying value of the real estate subject to leases with the operator and other collateral, if any, supporting our other investments, which may include accounts receivable, security deposits, letters of credit or personal guarantees, if any, as well as other liabilities recognized with respect to these operators. 16 Table of Contents The table below reflects our total revenues from the operators that are considered unconsolidated VIEs for the three months ended March 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2022 ​ 2021 ​ ​ ​ ​ (in thousands) Revenue ​ ​ ​ ​ ​ Rental income ​ ​ ​ $ 20,863 ​ $ 30,524 Other investment income ​ ​ ​ 3,766 ​ 3,945 Total ​ ​ ​ $ 24,629 ​ $ 34,469 ​ Consolidated VIEs During the first quarter of 2022, we entered into a joint venture, which owns two ALFs, for a $ 3.2 million cash contribution, representing 52.4 % of the outstanding equity of the joint venture. Concurrent with entering the joint venture, we sold one of the ALFs to the joint venture for $ 7.7 million in net proceeds. The joint venture is a VIE and we have concluded that we are the primary beneficiary of this VIE based on a combination of the ability to direct the activities that most significantly impact the joint venture’s economic performance and the rights to receive residual returns or the obligation to absorb losses arising from the joint venture. Accordingly, this joint venture has been consolidated. Omega is not required to make any additional capital contributions to the joint venture, and it is expected to be funded from the ongoing operations of the underlying properties. As of March 31, 2022, this joint venture has $ 25.6 million of total assets and $ 19.6 million of total liabilities, which are included in our Consolidated Balance Sheets. As a result of consolidating the joint venture, in the first quarter of 2022, we recorded a $ 2.9 million noncontrolling interest to reflect the contributions of the minority interest holder of the joint venture. No gain or loss was recognized on the initial consolidation of the VIE or upon the sale of the ALF to the joint venture. ​ NOTE 9 – INVESTMENTS IN JOINT VENTURES Unconsolidated Joint Ventures Omega owns an interest in a number of joint ventures that are accounted for under the equity method. These entities and their subsidiaries are not consolidated by the Company because it does not control, through voting rights or other means, the joint venture. The following is a summary of our investments in unconsolidated joint ventures (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Amount ​ ​ Ownership ​ Initial Investment ​ ​ ​ ​ Facility ​ Facilities at ​ March 31, ​ December 31, Entity ​ % ​ Date ​ ​ Investment (1) ​ Type ​ 3/31/2022 ​ 2022 2021 Second Spring Healthcare Investments ​ 15 % ​ 11/1/2016 ​ $ 50,032 ​ SNF ​ — ​ $ 11,565 $ 11,355 Second Spring II LLC ​ 15 % ​ 3/10/2021 ​ ​ 10,330 ​ SNF ​ — ​ ​ 5 ​ 8 Lakeway Realty, L.L.C. ​ 51 % ​ 5/17/2019 ​ ​ 73,834 ​ Specialty facility ​ 1 ​ ​ 71,014 ​ ​ 71,286 Cindat Joint Venture ​ 49 % ​ 12/18/2019 ​ ​ 105,688 ​ ALF ​ 65 ​ ​ 109,381 ​ ​ 111,792 OMG Senior Housing, LLC ​ 50 % ​ 12/6/2019 ​ ​ — ​ Specialty facility ​ 1 ​ — ​ — OH CHS SNP, Inc. ​ 9 % ​ 12/20/2019 ​ ​ 900 ​ N/A ​ N/A ​ ​ 273 ​ ​ 246 ​ ​ ​ ​ ​ ​ $ 240,784 ​ ​ ​ ​ ​ $ 192,238 ​ $ 194,687 (1) Our initial investment includes our transaction costs, if any. 17 Table of Contents The following table reflects our income (loss) from unconsolidated joint ventures for the three months ended March 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Entity ​ 2022 2021 ​ ​ (in thousands) Second Spring Healthcare Investments (1) ​ $ 285 ​ $ 11,411 Second Spring II LLC ​ ​ ( 2 ) ​ ​ ( 457 ) Lakeway Realty, L.L.C. ​ ​ 661 ​ 645 Cindat Joint Venture ​ 735 ​ 486 OMG Senior Housing, LLC ​ ( 83 ) ​ ( 101 ) OH CHS SNP, Inc. ​ 27 ​ ( 154 ) Total ​ $ 1,623 ​ $ 11,830 (1) The income from this unconsolidated joint venture for the three months ended March 31, 2021 includes a $ 14.9 million gain on sale of real estate investments. Asset Management Fees We receive asset management fees from certain joint ventures for services provided. For each of the three months ended March 31, 2022 and 2021, we recognized approximately $ 0.2 million of asset management fees. These fees are included in miscellaneous income in the accompanying Consolidated Statements of Operations. NOTE 10 – GOODWILL AND OTHER INTANGIBLES The following is a summary of our goodwill as of March 31, 2022 and December 31, 2021: ​ ​ ​ ​ ​ (in thousands) Balance as of December 31, 2021 ​ $ 651,417 Foreign currency translation ​ ( 393 ) Balance as of March 31, 2022 ​ $ 651,024 ​ The following is a summary of our intangibles as of March 31, 2022 and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2022 ​ 2021 ​ ​ ​ (in thousands) ​ Assets: ​ ​ ​ ​ Above market leases ​ $ 5,929 ​ $ 5,929 ​ Accumulated amortization ​ ( 4,365 ) ( 4,313 ) ​ Net above market leases ​ $ 1,564 ​ $ 1,616 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Below market leases ​ $ 71,072 ​ $ 66,324 ​ Accumulated amortization ​ ( 45,060 ) ( 38,091 ) ​ Net below market leases ​ $ 26,012 ​ $ 28,233 ​ ​ Above market leases, net of accumulated amortization, are included in other assets on our Consolidated Balance Sheets. Below market leases, net of accumulated amortization, are included in accrued expenses and other liabilities on our Consolidated Balance Sheets. The net amortization related to the above and below market leases is included in our Consolidated Statements of Operations as an adjustment to rental income. 18 Table of Contents For the three months ended March 31, 2022 and 2021, our net amortization related to intangibles was $ 1.6 million and $ 6.2 million, respectively. The estimated net amortization related to these intangibles for the remainder of 2022 and the subsequent four years is as follows: remainder of 2022 – $ 3.0 million; 2023 – $ 3.9 million; 2024 – $ 3.8 million; 2025 – $ 3.5 million and 2026 – $ 2.8 million. As of March 31, 2022, the weighted average remaining amortization period of above market lease assets is approximately ten years and below market lease liabilities is approximately seven years . ​ NOTE 11 – CONCENTRATION OF RISK As of March 31, 2022, our portfolio of real estate investments (including properties associated with mortgages, direct financing leases, assets held for sale and consolidated joint ventures) consisted of 962 healthcare facilities, located in 42 states and the U.K. and operated by 65 third-party operators. Our investment in these facilities, net of impairments and allowances, totaled approximately $ 9.9 billion at March 31, 2022, with approximately 97 % of our real estate investments related to long-term healthcare facilities. Our portfolio is made up of (i) 675 SNFs, 163 ALFs, 20 ILFs, 16 specialty facilities and two medical office buildings, (ii) fixed rate mortgages on 56 SNFs, two ALFs and two specialty facilities, and (iii) 26 facilities that are held for sale. At March 31, 2022, we also held other investments of approximately $ 506.9 million, consisting primarily of secured loans to third-party operators of our facilities and $ 192.2 million of investments in six unconsolidated joint ventures. At March 31, 2022 we had investments with two operators or managers that approximated or exceeded 10% of our total investments: Maplewood Senior Living (along with affiliates, “Maplewood”) and LaVie. Maplewood generated approximately 9.0 % and 7.5 % of our total revenues for the three months ended March 31, 2022 and 2021, respectively. LaVie generated approximately 11.3 % and 9.1 % of our total revenues for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, the three states in which we had our highest concentration of investments were Florida ( 13 %), Texas ( 10 %) and Michigan ( 7 %). NOTE 12 – STOCKHOLDERS’ EQUITY $ 500 Million Stock Repurchase Program On January 27, 2022, the Company authorized the repurchase of up to $ 500 million of our outstanding common stock from time to time through March 2025. The Company is authorized to repurchase shares of its common stock in open market and privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or in any other manner as determined by the Company’s management and in accordance with applicable law. The timing and amount of stock repurchases will be determined, in management’s discretion, based on a variety of factors, including but not limited to market conditions, other capital management needs and opportunities and corporate and regulatory considerations. The Company has no obligation to repurchase any amount of its common stock, and such repurchases, if any, may be discontinued at any time. During the first quarter of 2022, the Company repurchased 980,530 shares of our outstanding common stock at an average price of $ 27.84 per share. Under Maryland law, shares repurchased become authorized but unissued shares. The Company reduced the common stock at par value and to the extent the cost acquired exceeds par value, it is recorded through additional paid-in capital on our Consolidated Balance Sheets and Consolidated Statements of Changes in Equity. Dividends The following is a summary of our declared cash dividends on common stock: ​ ​ ​ ​ ​ ​ Record ​ Payment ​ Dividend per Date Date Common Share February 7, 2022 ​ February 15, 2022 ​ $ 0.67 May 2, 2022 ​ May 13, 2022 ​ ​ 0.67 ​ 19 Table of Contents Dividend Reinvestment and Common Stock Purchase Plan The following is a summary of the shares issued under the Dividend Reinvestment and Common Stock Purchase Plan for the three months ended March 31, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ Three Months Ended Shares issued ​ Gross Proceeds March 31, 2021 0.4 ​ $ 15.5 March 31, 2022 0.1 ​ ​ 2.3 ​ At-The-Market Offering Programs The following is a summary of the shares issued under our former $ 500 million 2015 At-The-Market Offering Program (“2015 ATM Program”) and our current $ 1.0 billion 2021 At-The-Market Offering Program (“2021 ATM Program”) for the three months ended March 31, 2022 and 2021 (in millions except average price per share): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Net Price ​ ​ ​ ​ ​ ​ Three Months Ended Shares issued Per Share (1) Gross Proceeds Commissions Net Proceeds March 31, 2021 1.6 $ 37.16 $ 61.4 $ 1.3 $ 60.1 March 31, 2022 — ​ — ​ — ​ — ​ — (1) Represents the average price per share after commissions. We did not utilize the forward provisions under the 2021 ATM Program during the first quarter of 2022. Accumulated Other Comprehensive Income (Loss) The following is a summary of our accumulated other comprehensive income (loss), net of tax where applicable: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the ​ ​ Three Months Ended March ​ 2022 2021 ​ ​ (in thousands) Foreign Currency Translation: ​ ​ ​ Beginning balance ​ $ ( 24,012 ) ​ $ ( 18,427 ) Translation (loss) gain ​ ( 14,630 ) ​ 3,530 Realized (loss) gain ​ ( 26 ) ​ 666 Ending balance ​ ( 38,668 ) ​ ( 14,231 ) ​ ​ ​ ​ ​ ​ ​ Derivative Instruments: ​ ​ Cash flow hedges: ​ ​ Beginning balance ​ 30,407 ​ 17,718 Unrealized gain ​ 18,612 ​ 35,191 Realized gain (1) ​ 966 ​ 610 Ending balance ​ 49,985 ​ 53,519 Net investment hedges: ​ ​ Beginning balance ​ ( 9,588 ) ​ ( 13,331 ) Unrealized gain (loss) ​ 3,847 ​ ( 3,010 ) Ending balance ​ ( 5,741 ) ​ ( 16,341 ) Total accumulated other comprehensive income before noncontrolling interest ​ 5,576 ​ 22,947 Add: portion included in noncontrolling interest ​ 742 ​ 283 Total accumulated other comprehensive income for Omega ​ $ 6,318 ​ $ 23,230 (1) Recorded in interest expense on the Consolidated Statements of Operations. ​ ​ ​ 20 Table of Contents NOTE 13 – TAXES Omega was organized, has operated and intends to continue to operate in a manner that enables Omega to qualify for taxation as a REIT under Sections 856 through 860 of the Code. On a quarterly and annual basis, we perform several analyses to test our compliance within the REIT taxation rules. If we fail to meet the requirements for qualification as a REIT in any tax year, we will be subject to federal income tax on our taxable income at regular corporate rates and may not be able to qualify as a REIT for the four subsequent years, unless we qualify for certain relief provisions that are available in the event we fail to satisfy any of the requirements. We are also subject to federal taxation of 100 % of the net income derived from the sale or other disposition of property, other than foreclosure property, that we held primarily for sale to customers in the ordinary course of a trade or business. We believe that we do not hold assets for sale to customers in the ordinary course of business and that none of the assets currently held for sale or that have been sold would be considered a prohibited transaction within the REIT taxation rules. As a REIT under the Code, we generally will not be subject to federal income taxes on the REIT taxable income that we distribute to stockholders, subject to certain exceptions. In 2021, we distributed dividends in excess of our taxable income. We currently own stock in certain subsidiary REITs. These subsidiaries are required to individually satisfy all of the rules for qualification as a REIT. If we fail to meet the requirements for qualification as a REIT for any of these subsidiaries, it may cause Omega to fail the requirements for qualification as a REIT also. We have elected to treat certain of our active subsidiaries as taxable REIT subsidiaries (“TRSs”). Our domestic TRSs are subject to federal, state and local income taxes at the applicable corporate rates. Our foreign TRSs are subject to foreign income taxes and may be subject to current-year income inclusion relating to ownership of a controlled foreign corporation for U.S. income tax purposes. As of March 31, 2022, one of our domestic TRSs that is subject to income taxes at the applicable corporate rates had a net operating loss (“NOL”) carry-forward of approximately $ 10.3 million. Our domestic NOL carry-forward was fully reserved as of March 31, 2022, with a valuation allowance due to uncertainties regarding realization. Under current law, NOL carry-forwards generated up through December 31, 2017 may be carried forward for no more than 20 years, and NOL carry-forwards generated in taxable years ended after December 31, 2017, may be carried forward indefinitely. We do not anticipate that such changes will materially impact the computation of Omega’s taxable income, or the taxable income of any Omega entity, including our TRSs. As discussed in Note 2 – Real Estate Assets, in connection with the acquisition of one U.K. entity in the first quarter of 2022, we acquired foreign net operating losses of $ 55.0 million resulting in a NOL deferred tax asset of $ 13.4 million. The NOLs have no expiration date and may be available to offset future taxable income. We believe these foreign NOLs are realizable under a “more likely than not” measurement and have not recorded a valuation allowance against the deferred tax asset. 21 Table of Contents The following is a summary of deferred tax assets and liabilities (which are recorded in other assets and accrued expenses and other liabilities, respectively, in our Consolidated Balance Sheets): ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2022 2021 ​ ​ (in thousands) Deferred tax assets: ​ ​ U.S. Federal net operating loss carryforward ​ $ 2,156 ​ $ 2,221 Foreign net operating loss carryforward ​ ​ 13,374 ​ ​ — ​ ​ ​ 15,530 ​ ​ 2,221 Deferred tax liability: ​ ​ Foreign deferred tax liability (1) ​ ( 7,883 ) ​ ( 8,200 ) Valuation allowance on deferred tax asset ​ ( 2,156 ) ​ ( 2,221 ) Net deferred tax asset (liability) ​ $ 5,491 ​ $ ( 8,200 ) (1) The deferred tax liability primarily resulted from inherited basis differences resulting from our acquisition of entities in the U.K. Subsequent adjustments to these accounts result from GAAP to tax differences related to depreciation, indexation and revenue recognition. The following is a summary of our provision for income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ March 31, ​ ​ 2022 2021 ​ ​ (in millions) Provision for federal, state and local income taxes ​ $ 0.3 $ 0.3 Provision for foreign income taxes ​ ​ 0.9 ​ 0.7 Total provision for income taxes (1) ​ $ 1.2 ​ $ 1.0 (1) The above amounts do not include gross receipts or franchise taxes payable to certain states and municipalities. NOTE 14 – STOCK-BASED COMPENSATION Stock-based compensation expense was $ 6.9 million and $ 5.4 million for the three months ended March 31, 2022 and 2021, respectively. Stock-based compensation expense is included within general and administrative expenses on our Consolidated Statements of Operations. We granted 31,685 time-based restricted stock units (“RSUs”) and 170,294 time-based profits interest units (“PIUs”) during the first quarter of 2022 to certain officers and key employees, and those units vest on December 31, 2024 ( three years after the grant date), subject to continued employment and vesting in certain other events. We also granted 1,545,070 performance-based PIUs during the first quarter of 2022 to certain officers and key employees, which are earned based on the level of performance over the performance period (normally three years ) and vest quarterly in the four th year, subject to continued employment and vesting in certain other events. Time-based and performance-based grants made to named executive officers and key employees that meet certain conditions under the Company’s retirement policy (length of service, age, etc.) vest on an accelerated basis pursuant to the 2018 Stock Incentive Plan. 22 Table of Contents NOTE 15 – BORROWING ACTIVITIES AND ARRANGEMENTS The following is a summary of our borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Annual ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ as of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ March 31, ​ December 31, ​ Maturity 2022 ​ 2022 2021 ​ ​ ​ ​ (in thousands) Secured borrowings: ​ ​ ​ HUD mortgages (1)(2) ​ 2046 - 2052 ​ 3.01 % ​ $ 357,910 ​ $ 359,806 2022 term loan (3) 2022 4.00 % ​ ​ 2,275 ​ ​ 2,275 2024 term loan (4) 2024 6.00 % ​ ​ 19,459 ​ ​ — Total secured borrowings ​ ​ ​ ​ ​ ​ ​ 379,644 ​ ​ 362,081 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unsecured borrowings: ​ ​ ​ Revolving credit facility (5)(6) 2025 1.82 % ​ 354,888 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Senior notes and other unsecured borrowings: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 notes (5) 2023 4.375 % ​ 350,000 ​ 350,000 2024 notes (5) 2024 4.950 % ​ 400,000 ​ 400,000 2025 notes (5) 2025 4.500 % ​ 400,000 ​ 400,000 2026 notes (5) 2026 5.250 % ​ 600,000 ​ 600,000 2027 notes (5) 2027 4.500 % ​ 700,000 ​ 700,000 2028 notes (5) 2028 4.750 % ​ 550,000 ​ 550,000 2029 notes (5) 2029 3.625 % ​ 500,000 ​ 500,000 2031 notes (5) ​ 2031 ​ 3.375 % ​ ​ 700,000 ​ ​ 700,000 2033 notes (5) ​ 2033 ​ 3.250 % ​ ​ 700,000 ​ ​ 700,000 OP term loan (7)(8) 2025 1.91 % ​ 50,000 ​ 50,000 Deferred financing costs – net ​ ​ ( 25,804 ) ​ ( 26,980 ) Discount – net ​ ​ ( 30,357 ) ​ ( 31,565 ) Total senior notes and other unsecured borrowings – net ​ ​ 4,893,839 ​ 4,891,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total unsecured borrowings – net ​ ​ 5,248,727 ​ 4,891,455 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total secured and unsecured borrowings – net (9)(10) ​ ​ $ 5,628,371 ​ $ 5,253,536 (1) Reflects the weighted average annual contractual interest rate on the mortgages at March 31, 2022. Secured by real estate assets with a net carrying value of $ 537.8 million as of March 31, 2022. (2) Wholly owned subsidiaries of Omega OP are the obligor on these borrowings. (3) Borrowing is the debt of a consolidated joint venture. (4) Borrowing is the debt of the consolidated joint venture discussed in Note 8 – Variable Interest Entities which was formed in the first quarter of 2022. The borrowing is secured by two ALFs which are owned by the joint venture. (5) Guaranteed by Omega OP. (6) As of March 31, 2022, borrowings under Omega’s $ 1.45 billion senior unsecured multicurrency revolving credit facility consisted of $ 110.0 million U.S. dollars (“USD”) and £ 186.0 million British Pounds Sterling (“GBP”). The interest rate presented reflects the weighted average interest rate on the borrowings under the revolving credit facility denominated in USD and GBP. (7) Omega OP is the obligor on this borrowing. (8) The interest rate swaps, that were cash flow hedges of Omega OP’s $ 50.0 million senior unsecured term loan facility (the “OP term loan”) interest payments and that effectively fixed the interest rate at 3.29 % , matured on February 10, 2022 . (9) All borrowings are direct borrowings of Parent unless otherwise noted. (10) Certain of our other secured and unsecured borrowings are subject to customary affirmative and negative covenants, including financial covenants. As of March 31, 2022 and December 31, 2021, we were in compliance with all applicable covenants for our borrowings . 23 Table of Contents NOTE 16 – DERIVATIVES AND HEDGING We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result of our investments in the U.K. and interest rate risk related to our capital structure. As a matter of policy, we do not use derivatives for trading or speculative purposes. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, interest rate swaps and debt issued in foreign currencies to offset a portion of these risks. As of March 31, 2022, we have five forward starting swaps with $ 400.0 million in notional value designated as cash flow hedges and four forward currency forwards with £ 174.0 million in notional value designated as net investment hedges. Two of our interest rate swaps that were entered into in May 2019 with aggregate notional amounts of $ 50.0 million matured on February 10, 2022 . These interest rate swap contracts were designated as hedges against our exposure to changes in interest payment cash flow fluctuations in the variable interest rates on the OP term loan. The location and the fair value of derivative instruments designated as hedges, at the respective balance sheet dates, were as follows: ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2022 2021 Cash flow hedges: (in thousands) Other assets $ 53,394 ​ $ 32,849 Accrued expenses and other liabilities $ — ​ $ 96 ​ ​ ​ ​ ​ ​ Net investment hedges: ​ ​ ​ ​ ​ Other assets $ 10,601 ​ $ 6,754 ​ The fair value of the interest rate swaps and foreign currency forwards is derived from observable market data such as yield curves and foreign exchange rates and represents a Level 2 measurement on the fair value hierarchy. NOTE 17 – FINANCIAL INSTRUMENTS The net carrying amount of cash and cash equivalents, restricted cash, contractual receivables, other assets and accrued expenses and other liabilities reported in the Consolidated Balance Sheets approximates fair value because of the short maturity of these instruments (Level 1). 24 Table of Contents At March 31, 2022 and December 31, 2021, the net carrying amounts and fair values of our other financial instruments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ December 31, 2021 ​ Carrying Fair Carrying Fair ​ Amount Value Amount Value ​ ​ (in thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments in direct financing leases – net ​ $ 10,849 ​ $ 10,849 $ 10,873 ​ $ 10,873 Mortgage notes receivable – net ​ 819,577 ​ ​ 841,432 ​ ​ 835,086 ​ ​ 869,715 Other investments – net ​ 506,942 ​ ​ 516,639 ​ ​ 469,884 ​ ​ 476,664 Total ​ $ 1,337,368 ​ $ 1,368,920 ​ $ 1,315,843 ​ $ 1,357,252 Liabilities: ​ ​ ​ ​ Revolving credit facility ​ $ 354,888 ​ $ 354,888 $ — ​ $ — 2022 term loan ​ ​ 2,275 ​ ​ 2,275 ​ ​ 2,275 ​ ​ 2,275 2024 term loan ​ 19,459 ​ ​ 19,750 ​ ​ — ​ ​ — OP term loan ​ 49,686 ​ ​ 50,000 ​ ​ 49,661 ​ ​ 50,000 4.375 % notes due 2023 – net ​ 349,242 ​ ​ 355,534 ​ ​ 349,100 ​ ​ 365,243 4.95 % notes due 2024 – net ​ 397,978 ​ ​ 408,984 ​ ​ 397,725 ​ ​ 427,184 4.50 % notes due 2025 – net ​ 397,875 ​ ​ 406,980 ​ ​ 397,685 ​ ​ 427,440 5.25 % notes due 2026 – net ​ 597,319 ​ ​ 622,896 ​ ​ 597,142 ​ ​ 667,524 4.50 % notes due 2027 – net ​ 692,739 ​ ​ 714,903 ​ ​ 692,374 ​ ​ 766,003 4.75 % notes due 2028 – net ​ 544,160 ​ ​ 559,916 ​ ​ 543,908 ​ ​ 607,249 3.625 % notes due 2029 – net ​ ​ 490,983 ​ ​ 472,485 ​ ​ 490,681 ​ ​ 519,430 3.375 % notes due 2031 – net ​ ​ 684,040 ​ ​ 641,347 ​ ​ 683,592 ​ ​ 705,810 3.25 % notes due 2033 – net ​ ​ 689,817 ​ ​ 610,575 ​ ​ 689,587 ​ ​ 683,151 HUD mortgages – net ​ ​ 357,910 ​ ​ 344,769 ​ ​ 359,806 ​ ​ 394,284 Total ​ $ 5,628,371 ​ $ 5,565,302 ​ $ 5,253,536 ​ $ 5,615,593 ​ Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument (see Note 2 – Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2021). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. The following methods and assumptions were used in estimating fair value disclosures for financial instruments. ● Mortgage notes receivable: The fair value of the mortgage notes receivables are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). ● Other investments: Other investments are primarily comprised of notes receivable. The fair values of notes receivable are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3). ● Revolving credit facility, OP term loan, 2022 term loan and 2024 term loan: The carrying amount of these approximate fair value because the borrowings are interest rate adjusted. Differences between carrying value and the fair value in the table above are due to the inclusion of deferred financing costs in the carrying value. ● Senior notes: The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices. 25 Table of Contents ● Subordinated debt: The fair value of our borrowings under these agreements are estimated using a present value technique based on inputs from trading activity provided by a third-party (Level 2). ● HUD mortgages: The fair value of our borrowings under HUD debt agreements are estimated using an expected present value technique based on quotes obtained by HUD debt brokers (Level 2). NOTE 18 – COMMITMENTS AND CONTINGENCIES Litigation Shareholder Litigation The Company and certain of its officers, C. Taylor Pickett, Robert O. Stephenson, and Daniel J. Booth , are defendants in a purported securities class action lawsuit pending in the U.S. District Court for the Southern District of New York (the “Securities Class Action”). Brought by lead plaintiff Royce Setzer and additional plaintiff Earl Holtzman, the Securities Class Action purports to assert claims for violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, as well as Section 20(a) of the Exchange Act, and seeks an unspecified amount of monetary damages, interest, fees and expenses of attorneys and experts, and other relief. The Securities Class Action alleges that the defendants violated the Exchange Act by making materially false and/or misleading statements, and by failing to disclose material adverse facts about the Company’s business, operations, and prospects, including the financial and operating results of one of the Company’s operators, the ability of such operator to make timely rent payments, and the impairment of certain of the Company’s leases and the uncollectibility of certain receivables. The initial complaint was dismissed with prejudice by the U.S. District Court, but the dismissal was overturned by the U.S. Court of Appeals for the Second Circuit in 2020. Thereafter, the plaintiffs filed a Second Consolidated Amended Complaint in August 2020. In November 2020, the Company and the officers named in the Securities Class Action filed a Motion to Dismiss the Second Consolidated Amended Complaint. On September 28, 2021, the Court issued an order denying the motion to dismiss insofar as it requested dismissal of the entire action on grounds of loss causation, and granting it insofar as it sought dismissal of any claims arising out of defendants’ statements in February 2017. Because the dismissed claims were the basis for defendants’ efforts to begin the alleged class period in February 2017, the decision means that the alleged class period runs from May 3, 2017 to October 31, 2017. Certain derivative actions have also been brought against the officers named in the Securities Class Action, and certain current and former directors of the Company, alleging claims relating to the matters at issue in the Securities Class Action. These derivative actions are currently stayed pending certain developments in the Securities Class Action. In 2018, Stourbridge Investments LLC, a purported stockholder of the Company, filed a derivative action purportedly on behalf of the Company in the U.S. District Court for the Southern District of New York, alleging violations of Section 14(a) of the Exchange Act and state-law claims including breach of fiduciary duty. The complaint alleges, among other things, that the named defendants are responsible for the Company’s failure to disclose the financial condition of Orianna Health Systems, the alleged non-disclosures that are also the subject of the Securities Class Action described above. The plaintiff did not make a demand on the Company to bring the action prior to filing it, but rather alleges that demand would have been futile. The case has been stayed pending the entry of judgment or a voluntary dismissal with prejudice in the Securities Class Action. In 2019, purported stockholder Phillip Swan by his counsel, and stockholders Tom Bradley and Sarah Smith by their counsel, filed derivative actions in the Baltimore City Circuit Court of Maryland, purportedly on behalf of the Company, asserting claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment against the named defendants. Those actions have been consolidated and stayed in the Maryland court pending completion of fact discovery in the Securities Class Action. Prior to filing suit, each of these stockholders had made demands on the Board of Directors in 2018 that the Company bring such lawsuits. After an investigation and due consideration, and in the exercise of its business judgment, the Board of Directors determined that it is not in the best interests of the Company to commence litigation against any current or former officers or directors based on the matters raised in the demands. 26 Table of Contents In addition, in late 2020, Robert Wojcik, a purported shareholder of the Company, filed a derivative action in the U.S. District Court for the District of Maryland, purportedly on behalf of the Company, asserting violations of Section 14(a) of the Exchange Act, Sections 10(b) and 21D of the Exchange Act, as well as claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Wojcik also did not make a demand on the Company prior to filing suit. The case has been stayed pending the entry of judgment or a voluntary dismissal with prejudice in the Securities Class Action. The Company believes that the claims asserted against it in these lawsuits are without merit and intends to vigorously defend against them. Other Gulf Coast Subordinated Debt In August 2021, we filed suit in the Circuit Court for Baltimore County (the “Court”) against the holders of certain Subordinated Debt associated with our Gulf Coast master lease agreement, following an assertion by the holders that our prior exercise of offset rights in connection with Gulf Coast’s non-payment of rent had resulted in defaults under the terms of the Subordinated Debt. The suit seeks a declaratory judgment to, among other items, declare that the aggregate amount of unpaid rent due from Gulf Coast under the master lease agreement exceeds all amounts which otherwise would be due and owing by a subsidiary of Omega (“Omega Obligor”) under the Subordinated Debt, and that all principal and interest due and owing under the Subordinated Debt may be (and was) offset in full as of December 31, 2021. In October 2021, the defendants in the case filed a motion to dismiss for lack of personal jurisdiction. A hearing was held on such motion on February 25, 2022, but the decision was taken under advisement. While Omega believes Omega Obligor is entitled to the enforcement of the offset rights sought in the action, the outcome of litigation is unpredictable, and Omega cannot predict the outcome of the declaratory judgment action, irrespective of whether it is litigated in the Court or, if the motion to dismiss for lack of personal jurisdiction is granted, in another court. Lakeway Realty, L.L.C. In September 2016, MedEquities received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice (“DOJ”), which indicates that it is conducting an investigation regarding alleged violations of the False Claims Act, Stark Law and Anti-Kickback Statute in connection with claims that may have been submitted to Medicare and other federal payors for services rendered to patients at Lakeway Hospital or by providers with financial relationships with Lakeway Hospital. As a result of the acquisition of MedEquities, the Company owns a 51 % interest in an unconsolidated partnership that owns Lakeway Hospital, Lakeway Realty, L.L.C. The CID requested certain documents and information related to the acquisition and ownership of Lakeway Hospital through Lakeway Realty, L.L.C. The Company has learned that the DOJ is investigating MedEquities’ conduct in connection with its investigation of financial relationships related to Lakeway Hospital, including allegations by the DOJ that these relationships violate and continue to violate the Anti-Kickback Statute and, as a result, related claims submitted to federal payors violated and continue to violate the False Claims Act. The Company is cooperating fully with the DOJ in connection with the CID and has produced all of the information that has been requested to date. On September 29, 2020, the Department of Justice announced it had reached a settlement of a False Claims Act case with Lakeway Regional Medical Center wherein Lakeway Regional Medical Center agreed to pay $ 1.1 million for inducing certain physicians to refer patients by offering a low risk and high return investment in the form of a joint venture to purchase and then lease back the hospital to Lakeway Regional Medical Center. A MedEquities subsidiary was a party to this transaction but was not included in settlement discussions, and we understand that the settlement did not fully resolve the investigation referenced in the CID. The documents relating to the settlement are not publicly available. The Company believes that the acquisition, ownership and leasing of Lakeway Hospital through the Lakeway Partnership was and is in compliance with all applicable laws. However, due to the uncertainties surrounding this matter and its ultimate outcome, we are unable to determine whether it is probable that any loss has been incurred. 27 Table of Contents In addition, we are subject to various other legal proceedings, claims and other actions arising out of the normal course of business. While any legal proceeding or claim has an element of uncertainty, management believes that the outcome of each lawsuit, claim or legal proceeding that is pending or threatened, or all of them combined, will not have a material adverse effect on our consolidated financial position or results of operations. Indemnification Agreements In connection with certain facility transitions, we have agreed to indemnify certain operators in certain events. As of March 31, 2022, our maximum funding commitment under these indemnification agreements was approximately $ 5.6 million. Claims under these indemnification agreements may be made within 18 months to 72 months of the transition date. These indemnification agreements were provided to certain operators in connection with facility transitions and generally would be applicable in the event that the prior operators do not perform under their transition agreements. Commitments We have committed to fund the construction of new leased and mortgaged facilities, capital improvements and other commitments. We expect the funding of these commitments to be completed over the next several years. Our remaining commitments at March 31, 2022, are outlined in the table below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total commitments $ 752,891 ​ ​ Amounts funded to date (1) ​ ( 532,002 ) ​ ​ Remaining commitments (2) ​ $ 220,889 ​ ​ (1) Includes finance costs. (2) This amount excludes our remaining commitments to fund under our other investments of approximately $ 41.2 million. NOTE 19 – EARNINGS PER SHARE The following tables set forth the computation of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March ​ 2022 2021 ​ ​ (in thousands, except per share amounts) Numerator: ​ ​ ​ Net income ​ $ 195,156 ​ $ 164,366 Deduct: net income attributable to noncontrolling interests ​ ( 5,549 ) ​ ( 4,388 ) Net income available to common stockholders ​ $ 189,607 ​ $ 159,978 Denominator: ​ ​ Denominator for basic earnings per share ​ 239,527 ​ 232,572 Effect of dilutive securities: ​ ​ ​ Common stock equivalents ​ 963 ​ 944 Noncontrolling interest – Omega OP Units ​ 7,066 ​ 6,391 Denominator for diluted earnings per share ​ 247,556 ​ 239,907 ​ ​ ​ ​ ​ ​ ​ Earnings per share - basic: ​ ​ Net income available to common stockholders ​ $ 0.79 ​ $ 0.69 Earnings per share – diluted: ​ ​ Net income ​ $ 0.79 ​ $ 0.69 ​ ​ ​ ​ ​ ​ ​ 28 Table of Contents NOTE 20 – SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS The following are supplemental disclosures to the Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2022 2021 ​ (in thousands) ​ Reconciliation of cash and cash equivalents and restricted cash: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 491,247 ​ $ 51,376 ​ Restricted cash ​ 3,534 ​ 4,522 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 494,781 ​ $ 55,898 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental information: ​ ​ ​ ​ ​ Interest paid during the period, net of amounts capitalized ​ $ 60,478 ​ $ 67,538 ​ Taxes paid during the period ​ $ 1,716 ​ $ 1,509 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash investing activities: ​ ​ ​ Non-cash acquisition of real estate ​ $ ( 11,133 ) ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash financing activities: ​ ​ ​ Non-cash contribution from noncontrolling interest holder in consolidated joint venture ​ $ 2,903 ​ $ — ​ Change in fair value of cash flow hedges ​ $ 24,489 ​ $ 36,672 ​ Remeasurement of debt denominated in a foreign currency ​ $ ( 320 ) ​ $ 3,010 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 29 Table of Contents